LATEST COB 241: Ch 7 Exam Questions With 100% Answers

ournal entry to recognize accrued interest includes a: - ANSWER- credit to Interest Revenue debit to Interest Receivable When a company recognizes uncollectible accounts expense, - ANSWER- cash flow from operating activities is not affected Which of the following statements is affected when a company writes-off an uncollectible account receivable - ANSWER- balance sheet when a company recognizes a write-off of an uncollectible account, the balance of the: - ANSWER- Allowance for Doubtful Accounts decreases Accounts Receivable decreases When a company reinstates an account receivable that had previously been written-off: - ANSWER- cash flow from operating activities is NOT AFFECTED net income is NOT AFFECTED When a company reinstates an account receivable that had previously been written-off, the balance in the - ANSWER- Accounts Receivable INCREASES Allowances for doubtful accounts INCREASES When a company writes-off an uncollectible account under the allowance method, the amount of: - ANSWER- total assets is NOT AFFECTED cash flow from operating activities is NOT AFFECTED net income is not affected When an uncollectible account is written-off, the balance in the Accounts Receivable account ... and the balance in the Allowance for Doubtful Accounts account ... - ANSWER- decreases decreases the net realizable value of accounts receivable is - ANSWER- an estimate that represents the amount of cash a company expects to collect from its accounts receivable the ending balance of accounts receivable less an allowance representing the amount of accounts a company expects to be uncollectible when uncollectible accounts expense is recognized, this event causes the balance in the - ANSWER- uncollectible accounts expense INCREASES allowance for doubtful accounts INCREASES when a company recognizes a write-off an uncollectible account, the balance in the - ANSWER- Allowance for Doubtful Accounts DECREASES Accounts Receivable DECREASES Which of the following represents the formula for calculating the net realizable value of receivables - ANSWER- Accounts receivable Less: Allowance for doubtful accounts = Net realizable value of receivables Ellen Company loaned $10,000 cash to Ann Company on August 1, Year 1. The loan had a one year term and a 6% annual interest rate. Match the amounts shown with Ellen Company's financial statement items. - ANSWER- Year 1 revenue = $250 Year 1 cash flow from operations = $0 Year 2 revenue = $350 Year 2 cash flows from operations = $600 On Aug 1, Year 1, Star Company loaned Moon Company money. Due to the Dec 31, Yr 1 adjustment to recognize accrued interest on Star's books, the balance in the Interest Receivable account ... and the balance in the Interest Revenue account ... - ANSWER- Interest Receivable INCREASES Interest Revenue INCREASES Stable company recognized accrued interest revenue. This event would affect which of Stable company's financial statements - ANSWER- Income statement balance sheet